An Allahabad High court ruling involving troubled automaker LML has put the spotlight on the need for neat sequencing of recovery initiatives by lenders, with both banks and company managements often rushing to dedicated tribunals to start bankruptcy proceedings.
The court barred parallel proceedings in the National Company Law Tribunal (NCLT) and the Debt Recovery Tribunal (DRT) in a case between the State Bank of India (SBI) and an individual guarantor for Kanpur-based LML that had defaulted on Rs 73 crore in loans.
SBI was the largest lender in the deal that involved the twowheeler company. The petitioners, including Sanjeev Shriya, a director of the company, and Deepak Singhania, chairman and director, were the guarantors for the…
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